What To Do With $100k A Proven strategy In 2022

What To Do With $100k A Proven strategy In 2022

If you have a whooping $100k, that is a good start. The next stage is knowing what to do with the money or investing it properly.

But the question is, what to do with the $100k.

Having $100k puts you in an advantageous position, but you’re probably wondering about the best strategy to handle the money.

Not to worry, we will show you many strategies so you can choose the best place to invest.

Why Invest Your money?

According to Wells Fargo, investing effectively puts your money to work and potentially builds wealth. Smart saving may allow your money to outpace inflation and increase in value.

The greater growth potential of investing is primarily due to the power of compounding and the risk-return tradeoff.

Here are some benefits of investing: investing is more than building rainy day savings. On a practical level, saving involves putting aside money today for use in the future.

Also, by investing early over time, your money grows in value, benefiting from the magic of compounding. You will beat inflation, and you earn additional income.

How Do You Invest?

The first thing is to ask yourself, how do you want to be involved in handling your money? In other words, would you like to take a more passive approach to managing your money’s growth? Do you want to invest on your own, or do you want advice from a professional?

You will need an online discount broker if you wish to make your investments. You make the assets using an internet broker’s platform. Before deciding, consider the following:

  • The kind of investments you’re interested in.
  • What type of trading do you want (active or passive)
  • Platform charges (this is especially important for day traders)
  • Also, the required minimum balance.

You need a financial advisor if you like personalized advice. Here are two categories of financial advisors that exist:

  • Robo-advisor: A robotic advisor is a smart option if automated investing is more your style. After you provide information regarding your risk tolerance and schedule for goals, Robo-advisors invest on your behalf.
  • Full-Service Financial Advisor – A full-service financial advisor is a better choice if you want full-service investment advice, including guidance on how to manage your money otherwise. Please pay special attention to the costs for both alternatives because they can quickly eat up any gains you could have from your investments.

What To Do With $100k: Where To Invest

Once you decide the type of investment you want, it’s time to think about what to do with $100k. Note that where you invest depends on your risk tolerance and goal timeline.

For example, investing your money in stocks is a riskier investment with a long-term goal, whereas investing in bonds is a lower risk.

Here are strategic investments to consider if you are thinking about what to do with your $100k.

#1. Exchange-Traded Funds

ETFs are a low-cost investing option that diversifies your portfolio for you. They are collections of stocks that cover various sectors or topics.

ETFs are a terrific method to profit from the market’s performance without paying the high cost of stock trading because they are already diversified and are not actively managed.

You can select broad or specific topics, the market segment in which you are most interested, and pay inexpensive fees for the passively managed fund. The strategic investment you can make with $100,000 is also this one.

#2. Stock

Investing in individual stocks is risky. It may pay off if you know what you’re doing and diversify your portfolio. Most do-it-yourself investors utilize a financial advisor to buy individual stocks.

There are a few outliers, but most Robo-advisors stick to ETFs and mutual funds rather than equities.

If you want to make your portfolio more aggressive, investing a tiny amount of your $100,000 in stocks is a fantastic way to do it.

#3. Peer-to-Peer Lending

You become a lender as well as hundreds or thousands of other investors through peer-to-peer (P2P) lending.

Based on the information given, you decide who and how much you will invest your $100k using a P2P platform.

With most platforms, you may diversify your investments by funding each loan with as little as $25. P2P investments frequently provide 5–10% returns and offer a passive income in the form of interest payments.

In addition, this is one of the strategic investments to do with $100k.

#4. Investment Real Estate

You can purchase a property outright for $100k or make a substantial down payment on an investment home. If you’ve always wanted to, this is your chance to become a landlord.

It’s straightforward: purchase a property, do any necessary repairs to make it livable for tenants, and rent it out.

The rent becomes your monthly cash flow after deducting any outgoing costs, such as the mortgage on the home.

Additionally, you are building equity in the house and capital gains for a potential sale in the future.

There are several tax benefits to owning an investment property in the form of business write-offs, but be cautious of capital gains taxes when you sell.

#5. Real Estate Investment Trusts

Consider a real estate investment trust (REIT), a specialized type of exchange-traded fund if real estate is your primary emphasis.

You put the money into the trust, and the fund manager takes care of everything else, including diversifying the fund’s capital among different investments. Like an ETF or mutual fund, REITs are traded on the open market.

Other Things To Do With $100k

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